Weak Housing Market Keeps Mortgage Rate Rises in Check

30-year fixed-rated mortgages rise to 4.33%.

Feb 20, 2014 at 11:30AM

Freddie Mac released its weekly update on national mortgage rates on Thursday morning, and for the first time in three weeks, all four of the major mortgage products have agreed on a direction in which to move: up.

Fifteen-year fixed-rate mortgages, or FRMs, tacked on two basis points over the past week, rising to 3.35%. Thirty-year FRMs got even more expensive, rising five basis points to reach 4.33%.

Among adjustable-rate mortgages, one-year ARMs rose two basis points to 2.57%, while 5/1 ARMs rose three basis points to 3.08%.

Commenting on the results, Freddie Mac Vice President and Chief Economist Frank Nothaft pointed out in a press release that minutes from the Federal Reserve's last meeting "indicated little possibility of a pause in the central bank's reduction of bond purchases."

That suggests interest rates in general will rise in the future, and so it's natural that mortgage rates would inch up in anticipation of such a move.

Helping to mitigate this effect, though, is the fact that housing starts in January declined 16%, while applications for housing permits are also being received at a slower rate than anticipated. Both of these data points suggest lessened demand for housing -- and it's a fundamental rule of economics that when demand declines, so too do prices tend to fall. Thus, weakness in the housing market is helping to keep mortgage rates in check.




Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers